July 2017

July 31, 2017

Representative Steve Stivers (R-Ohio), along with Rep. Tim Walz (D-Minn), has reintroduced the Bureau of Consumer Financial Protection-Inspector General Act, which would create an independent inspector general at the Consumer Financial Protection Bureau. The position would be appointed by the President and confirmed with the advice and consent of the Senate.

The CFPB currently shares an inspector general with the Federal Reserve Board, an unconfirmed position appointed by the Fed's chairman, according to Stivers's press release. Stivers said, "This legislation will allow for increased oversight of an agency that has been given broad authority--and often overreaches that authority."

July 28, 2017

A Consumer Financial Protection Bureau blog post discusses several tools the bureau has developed to help consumers with the home buying process. The "From here to homeowner" roadmap is intended to help consumers understand the steps involved in buying a new home and getting a mortgage, according to the post.

In addition, the "Explore interest rates" tool is intended to help consumers understand the range of mortgage interest rates they can expect to receive, based on their credit scores, loan type, home price, and down payment. Finally, the "Loan Estimate Explainer" and "Closing Disclosure Explainer" are designed to help consumers understand the loan estimate and closing disclosure forms associated with their mortgage loans.

July 26, 2017

The House of Representatives voted 231-190 on July 25 to block the Consumer Financial Protection Bureau's rule banning mandatory predispute arbitration clauses in certain consumer financial product and service contracts if those clauses prevent class actions. The resolution of disapproval (H.J. Res. 111) used authority provided under the Congressional Review Act and also would prevent the CFPB from issuing a similar rule in the future.

In remarks on the House floor, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the CFPB had "joined forces in an unholy alliance" with the trial lawyers lobby to "specifically deprive consumers of a low-cost, easy way to resolve legal disputes that can be accomplished without hiring trial attorneys." But in a statement issued after passage of the resolution, Financial Services Committee Ranking Member Maxine Waters (D-Calif) said, "Republicans have shamefully moved to nullify the Consumer Bureau's good work, in a move that ultimately enables financial institutions to get off the hook when they commit wrongdoing, with less redress for consumers."

July 24, 2017

Five federal financial regulatory agencies have announced that they will not take action under the Volcker Rule for qualifying foreign excluded funds for a period of one year while they review Volcker Rule regulations to ensure that excluded funds do not become subject to the rule. The agencies are the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Securities and Exchange Commission, and Commodity Futures Trading Commission.

In their joint press release, the agencies explained that complexities in Section 619 of the Dodd-Frank Act and its implementing regulations may result in certain foreign excluded funds becoming subject to regulation because of governance arrangements with or investments by a foreign bank. As a result, a number of foreign banking entities, foreign government officials, and other market participants have expressed concern about possible unintended consequences and extraterritorial impact.

July 21, 2017

Republicans on the Senate Banking Committee and the House Financial Services Committee have introduced resolutions of disapproval to nullify the controversial rule published by the Consumer Financial Protection Bureau banning mandatory predispute arbitration clauses in consumer financial product contracts if those clauses prevent class actions.

In the Senate, Banking Committee Chairman Mike Crapo (R-Idaho) and Republican colleagues filed a Congressional Review Act Joint Resolution of Disapproval against the rule. According to Crapo, "The rule is based on a flawed study that leading scholars have criticized as biased and inadequate, noting that it could leave consumers worse off by removing access to an important dispute resolution tool."

In the House, Rep. Keith Rothfus (R-Pa) introduced H.J. Res 111, which was cosponsored by all 34 Republican members of the Financial Services Committee. In response, Rep. Maxine Waters (D-Calif), Ranking Member of the Financial Services Committee, blasted Republicans for trying to take away consumers' rights to be heard in a court of law.

July 19, 2017

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) has written to Acting Comptroller of the Currency Keith Noreika questioning Noreika's objections to the Consumer Financial Protection Bureau's final rule that was issued to protect consumers from forced arbitration clauses in certain contracts. According to Brown's press release, these clauses force customers into secret arbitration proceedings run by private industry and often bar consumers from joining class actions.

Noreika had written two letters to CFPB Director Richard Cordray expressing concerns of OCC staff over the bureau's final rule, but in his letter to Noreika, Brown said "your letters raise no specific safety and soundness issues. Instead, they make several overtly political arguments against the adoption of the CFPB's rule." He also said, "It is disappointing but not altogether surprising that the OCC is trying to manufacture an argument that a vital consumer protection conflicts with the safety and soundness of banks," adding that such an argument "is as specious today as it has been in the past."

Brown also asked Noreika to provide documentation and analysis that supports the OCC's claims, among other information.

July 18, 2017

The Consumer Financial Protection Bureau is requesting to renew, without change, the Office of Management and Budget approval for an existing information collection entitled "Generic Information Collection Plan for Consumer Complaint and Information Collection System (Testing and Feedback)."

According to the bureau's notice, this collection is related to certain service delivery-focused activities contemplated by the Dodd-Frank Act that include consumer complaint and inquiry processing, referral, and monitoring, and involve several interrelated systems. Written comments on the proposed renewal must be received by Sept. 18, 2017.

July 17, 2017

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has issued a statement regarding what a committee press release called "the ever-growing list of actions, rules and regulations coming out of the CFPB over the last week--including finalization of updates to its 'Know Before You Owe' mortgage disclosure rule, selection of new Consumer Advisory Board members, finalization of its arbitration rule, and proposed changes to the reporting requirements for banks and credit unions that issue home-equity lines of credit."

Saying that CFPB Director Richard Cordray had previously declined to say whether he would serve his full term, Hensarling added, "If Director Cordray wishes to issue midnight rules, to hire or adjust the status of CFPB employees, to obligate CFPB funds, or to accelerate agency investigations, he should first commit to serving his full term. If he will not do so, the honorable course of action would be to resign and leave such decisions to his successor."

July 14, 2017

The Consumer Financial Protection Bureau is proposing to renew, without change, the Office of Management and Budget approval for an existing information collection entitled "Fair Credit Reporting Act (Regulation V)." According to the bureau's notice, the consumer disclosures included in Reg. V are designed to alert consumers to negative information furnished about them to a consumer reporting agency, the use of their credit reports in setting material terms of credit that may be less favorable than the terms offered to consumers with better credit histories, and certain rights they have.

On Feb. 23, 2017, the CFPB issued a 60-day notice in 82 Federal Register 11437 requesting comment on the proposed renewal. Written comments on the current notice must be received by Aug. 16, 2017, and will be reviewed by the OMB as part of its review of the requested renewal.

July 13, 2017

The Royal Bank of Scotland Group plc has agreed to pay $5.5 billion to resolve claims brought against RBS, related companies, and specifically named individuals by the FHFA in relation to RBS's issuance and underwriting of approximately $32 billion of residential mortgage-backed securities.

The FHFA had charged RBS with violating federal and state securities laws in connection with private-label RMBS trusts purchased by Fannie Mae and Freddie Mac between 2005 and 2007. RBS will pay approximately $4.525 billion to Freddie Mac and approximately $975 million to Fannie Mae. As a part of the settlement agreement, RBS did not admit to any wrongdoing.